What General Bajwa says

“The point is simple:

Development projects are not meant for saving any economy.

Instead, they are meant for running the economy.”

One thing is now obvious: the balance of Pakistan’s system is out. The civil-military skirmish, which began from behind closed-door meetings, popped up on twitter, and attained the form of delivering speeches, has now surfaced in seminars. Civil and military are together like oil and water. The sound of dissonance is shrieking and squawking.

On October 11, while delivering a keynote address, Chief of Army Staff General Qamar Javed Bajwa addressed to a seminar, “Interplay of Economy and Security,” in Karachi and exposed his understanding of economy and its link with security. The seminar was jointly organised by the Inter-Services Public Relations (ISPR) and the Federation of Pakistan Chambers of Commerce and Industry. What is apparent is that General Bajwa took refuge in a simple bivariate relationship between economy and security, and then walloped in that relationship, instead of valuing the significance of a multivariate relationship dipped in complexity. If things were so simple!

Even if it were assumed that there would a link between economy and security, this link is not final and cannot be explained through adjectives such as strong or weak. There are other links available such as between politics and economy; between politics and security; between politics, economy and security; and so on. For instance, the economic performance of the incumbent political government is better than the economic performance of the previous political government. The same is true regarding the law and order and security situation. In this example, politics takes precedent over economy and security. Unfortunately, the hypothetical link between economy and security cannot be of cause and effect; instead, the link is of correlation, in which several other independent variables play their due roles, to meet the need of multivariate relationship. Nevertheless, in the recent history, it is the first time a COAS has spoken on economy, though in the pretext of inter-relationship between economy and security.

On October 12, 1999, when former COAS General Pervez Musharraf took over the reins of the civilian government, he offered the same excuse of economic problems of the country, besides accountability. Military dictators have carved out a history of duping people into believing in the veracity of their intent and the excellence of their expertise. The accessory privilege is that they survive beyond accountability, though General Musharraf still revels in counting his facebook followers. The tutelage of General Musharraf put Shaukat Aziz in the picture. General Musharraf gave Aziz a free hand to play with the economy. Aziz did two main things. First, he transformed economy from conserved market economy (protected by various import laws) to liberal market economy (out of the bounds of import laws). Aziz envisioned consumer economy likened to the one in the West where he used to run a private bank. Secondly, Aziz met the aim of expanding the tax base of economy by making it rely mostly on indirect taxes such as the sales tax and not on direct taxes such as the income tax. Aziz envisaged the growth of the sales tax a solution for the narrow tax base of the economy.

In the seminar, the COAS said, “development projects alone won’t save Pakistan’s economy. The issue of national debt needs to be given priority.” The point is simple: Development projects are not meant for saving any economy. Instead, they are meant for running the economy. Development projects stimulate economy and ensure circulation of wealth, as investors prefer investment to stacking money because of high rate of return. This idea is an anti-thesis to the stagnation of economy when investors avoid investment, transfer their money overseas or await a better opportunity to capitalise. Nevertheless, the privilege enjoyed by economic experts such as Aziz is that, like military dictators, they also remain answerable to none. It was Aziz under the command of General Musharraf that constructed the contours of the present state of economy and its sectors to count on. Sales tax is now the mainstay of the health of economy. The reliance on sales tax domestically also allows the government to countenance a high import bill and hence the budget deficit. The incumbent government is in no position to reverse the system. If the COAS were dissatisfied with the present state of economy enjoying high growth but encumbered with high debt, he would have invited General Musharraf and Aziz to the seminar and listened to them. Political governments establish their own goals to fulfill. Unlike military regimes and their cronies, political governments are accountable to people through vote. The incumbent government seems in no mood to let the debt overrun the gains and knock it out of next elections.

To support the argument of linking economy with security, the COAS cited the example of the former USSR by saying, “erstwhile USSR had no dearth of armoured divisions but it broke up due to weak economic base.” Interestingly, the real situation is a bit different. The breakup of the former USSR was not simply because of the cause-and-effect relationship between economy and security, there were several other factors. To begin with, the Soviet political system was intolerant to political dissent, especially against war and expansion. If political dissent were present and revered in the former USSR, it would not have entered Afghanistan or it would have withdrawn earlier. It was incorrect political decision that encumbered Soviet economy with war expenditures. Secondly, compared to the capitalist system, which incentivised risk taking by individuals to innovate and recirculate wealth, the socialist system afforded monopoly to state ownership on the means of producing and circulating wealth. Before delivering his keynote to the seminar, the COAS might have not thought, for instance, why could the Vietnam War not disintegrate the US and why could the Afghanistan war crumble the former USSR?

The tyranny is that it was known to the COAS that the political situation was volatile and his comments on the economy and financial distribution of resources would provoke the opposition into criticising and agitating against the sitting government. Nevertheless, assuming that the COAS might be concerned about economy, the following four inferences can be drawn from his keynote address. First, the army is fed up of the US-led war on terror. Second, the army is averse to the US dictations and veiled threats. Third, the army thinks that owing to high debt the political government would compromise financially with the US for aid or with US sponsored agencies such as the IMF for loans. Fourth, the army thinks that the government should take the help of neither the US nor the IMF, as the money given by them would compel the army to be compliant with the US. In short, despite all flaws in argument presentation and despite violating all norms of constitutionalism, General Bajwa has tried to say that financial independence of the government will make the army independent of the influence of the US. General Bajwa is right in saying so. The incumbent government should listen to him sympathetically.